Experts call to finance the budget deficit by reducing the rate of the dinar

[k98nights]

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05/19/2015 (00:01 pm)   -   the number of readings: 316   -  number (3363)

 

 

 

 

Experts call to finance the budget deficit by reducing the rate of the dinar

Baghdad / al-Suhail Ahmed 

Called for an economist to reconsider monetary policy especially with regard to auction currency under the shadow of the current conditions of the different dollar exchange rates, the fixed exchange rate under the auction price parallel exchange market, and while noting the weakness of the regulatory agencies in the follow-up dollar sales and punctuated of money laundering and smuggling, he noted that one of the available solutions is to reduce the rate of the Iraqi dinar against the dollar

 

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The economist said Maytham coffee in an interview for the "long" that "currency auction has become a big burden on the central bank with the entry of the budget in 2015, and lower oil prices, especially as we enter the new dollar wave and begin to phase separation between the exchange rate determined under the auction and exchange rate the parallel market, down to multiple later exchange rates. " 
"The auction could not find a clear mechanism to separate the real needs of the market, and what it requires of dollars, and what goes of those dollars abroad without exchange for imported goods, and what falls under different labels such as smuggling or escape or money laundering, "pointing out that" the regulators and statistical did not answer whether there was a gap between the dollar sales and the corresponding imports, the volume of money laundering, especially since the central bank law allows the provision of the dollar and the freedom to transfer and trade. " 
He continued by saying that "exchange rate of the Iraqi dinar is backed auction overstated its currency although it meets the needs of the previous stage in an efficient, but because of the current conditions of low oil prices and the growing budget deficit to dangerous levels, can begin to reduce the exchange rate gradually it is possible to achieve more of an advantage." pointing out that the "currency auction was not discussed seriously and in-depth the potential to change the dinar's exchange rate against the dollar and the possibilities of the cases raise the value of the dinar or reduced." 
He noted that "the time has come to open an in-depth conversations about reconsider auction currency, and open horizons wider regarding visions How about the state management of the economy and distribution of wealth, and alleviate dependence on petrodollars and rents, and a review of the overall business, financial and monetary policies. " Describing the last stage, which was marked by financial abundance "It has deepened the poor distribution of wealth and lost efficiency considerations." 
He noted that the "reduction of the local currency will lead to the reduction of the budget deficit gradually, and covers the case of low dangerous liquidity experienced and will cut imports because the goods will be more expensive , leading to rationing of consumption at the macro level, as well as the devaluation will reduce the incentive to smuggle the dollar. " 
He guessed that "contributes to devaluation to increase domestic production and stimulate the private sector and contribute to increased employment, especially if such a reduction accompanied consistent fiscal policy pour in this goal. " 
On the possibility of higher commodity prices in the event of the State proceeded to raise the price of the dinar between coffee that "despite what has caused the increase in commodity prices, but the national interest of the country sometimes requires doing such so steps, and could represent a reduction in the dinar exchange rate policy , and leads him by rises in the prices of various commodities, a substitute for taxes that are difficult to talk about and apply now while higher commodity prices will be a substitute for indirect taxes, both of which can lead the same effect on the reduction in, what leads to the reduction of demand and consumption. " pointing out that "devaluation deliberate policy rate resort has a lot of countries." 
He continued by saying that "the central bank should not be responsible for trade policy and imports of the private sector alone, and return to the traditional role of which is to maintain the stability of domestic prices, including the exchange rate." pointing out that "the current oil shock should not pass without the benefit of studied." 
to the Economic Ihsan Jabr expert said in an interview for the "long" that "the state is obliged to determine the dollar supply size, because it does not have sufficient liquidity to launch the offer, in the absence of for devices that limit and control the smuggling. " 
He added that "the Iraqi market heavily dependent on imported goods and the private sector needs a large amount of hard currency to import process Therefore, determining the amount of the dollar sold will lead to determine the volume of goods imported by the private sector." 
He pointed out that "increases the demand for the dollar in the market by all sectors led to the creation of a gap between the exchange rate at the auction 1170 dinars to the dollar and the parallel market, which reached exchange rates in which the limits of 1300 dinars." 
He noted that "the state is not free to raise the dollar prices against the dinar because this will create some sort of turmoil and would reduce the purchasing power of citizens. " 
He continued by saying that "before the State two choices: either increase the width of the dollar and this is difficult under the shadow of the current circumstances, or reduce the demand for it but we do not have a regulatory system effectively limits the flight and money laundering, and demand is unjustified operations the dollar and the follow-up of banking companies that are not possess official documents. " 
He concluded his speech by saying that "if it continues to determine the width dollar pessimistic indicators in the market will increase leads to the formation of additional demand for the dollar and increase prices further." 
The International Monetary Fund predicted in (March 21, 2015 ), the high proportion of the deficit in the budget for Iraq in 2015 to more than the proportion of the 12 percent announced by the government, because of lower oil prices and the weakness of the possibility of Iraq's commitment to export 3.3 million barrels per day, and assume the budget, and the proposed implementation of reform measures strict include austere in investment projects, and a commitment to reducing expenses, and the revision of the maximum limits of central bank sales of the currency, referring to the overall growth contraction, and the prospect of rising inflation slightly the end of this year. The current year's budget law, committed the Central Bank of Iraq, in paragraph 50, identifying sales of foreign currency (dollar) in the daily auction ceiling does not exceed 75 million dinars, with the exercise of justice in the sale, and claim participant in the auction the bank to provide the introduction of goods and data documents Tax settling accounts and savings Alkmarki within 30 days from the date of purchase of the amount, and so it applied the sanctions set forth in the Central Bank Act or regulations issued it, and use other banking instruments to maintain the strength of the dinar against the dollar.

 

http://almadapaper.net/ar/news/487908/%D8%AE%D8%A8%D8%B1%D8%A7%D8%A1-%D9%8A%D8%AF%D8%B9%D9%88%D9%86-%D8%A5%D9%84%D9%89-%D8%AA%D9%85%D9%88%D9%8A%D9%84-%D8%B9%D8%AC%D8%B2-%D8%A7%D9%84%D9%85%D9%88%D8%A7%D8%B2%D9%86%D8%A9-%D9%85%D9%86-%D8%AE%D9%84

 

[hammer911]

Maybe someone can splain this!!!

[k98nights]

Maybe someone can splain this!!!

 

Their reasoning makes no sense at all!!

[NeedRv]

Maybe someone can splain this!!!

Lucyyyyyyyy you got some Splaining to dooooo...... 

[k98nights]

Lucyyyyyyyy you got some Splaining to dooooo...... 

 

 

[olivesman]

As always, SOMETHING is lost in translation...

[MyLadiesDaddy]

Reduce as in

1166 down to say 1000.

[Laid Back]

1:1 will be great... Keeping the 000's

[Adam Montana]

Reduce as in

1166 down to say 1000.

 

That would certainly help with the complexities and difficulties of exchange rates!

 

Another thing that would ease the burden of the daily auctions would be a simple 1:1 exchange. Or even a 1:1.05, so the CBI pays out 1 but keeps that extra nickel as profit. BOOM! Happy days

[idplzr]

That would certainly help with the complexities and difficulties of exchange rates!

Another thing that would ease the burden of the daily auctions would be a simple 1:1 exchange. Or even a 1:1.05, so the CBI pays out 1 but keeps that extra nickel as profit. BOOM! Happy days

Good point but it goes against your .10 thesis. Are you moving away from the original thoughts? If so, why? Edited May 20, 2015 by idplzr

[jcfrag]

If you read the headline it sounds GREAT!!

Please Please do go ahead and reduce that rate so your dang currency will be more valuable than toilet paper!!

What a novel idea.

I can't believe someone finally came right on out and said it !!!!

LISTEN TO THE EXPERTS IRAQ!!!!

 

     

[Calijim1]

How much lower than a 10th of a penny is there. These guys are talking like the dinar has significant value now. Time for them to pull their heads out of their arses and smell the camel dung their spreading.